Forecast

Shelton's Latex International seeks bankruptcy protection

Richard Lee
| on June 6, 2014

A Shelton company that survived a disastrous arson in 1975 and another conflagration in 2001 is now battling for its life in federal bankruptcy court.

The U.S. Bankruptcy Court in Bridgeport on Wednesday granted all four first-day motions proposed by Latex Foam International Holdings of Shelton as the company seeks Chapter 11 bankruptcy protection. Its subsidiary businesses, including Latex International and Pure LatexBLISS, are part of the filing.

Latex International relocated to a 208,000-square-foot facility at 510 River Road in Shelton in 2002 after a fire destroyed its Ansonia building in 2001.

The goal of the bankruptcy is to continue operations and producing its Talalay Latex, said James Berman, a partner in the Bridgeport law firm of Zeisler & Zeisler, which is representing the company.

Latex International reported about $29 million in liabilities and $26 million in assets prior to the ruling.

"The debtor has authority to use its cash to pay its bills and its employees. A creditors committee has not been appointed yet. The goal is to emerge as a viable business," said Berman, who expects the hearing to continue on June 26.

The key motions granted Wednesday were for joint administration, use of cash collateral which permits the business to operate in the ordinary course of business and to pay pre-petition payroll, according to a statement issued by the company. The other key motion granted by the court involved authorization to maintain existing bank accounts.

"We are very pleased that the court granted all our first-day motions," said David Fisher, Latex International president and CEO, in a statement. "The results will enable us to continue to provide the utmost in service to our customers as the world's largest Talalay Latex component producer. Our vendor relationships, as well as our commitment to our employees, will continue as usual."

He was not available to discuss details about the company's financial situation.

The company said it has more than 200 employees who produce mattress cores, toppers and pillow buns. About 170 are employed at the River Road building and another at 12 Commerce Drive in Shelton. According to its website, it also has an operation in Wichita Falls, Texas. It also has a business partner in Atlanta called Pure LatexBLISS and manages more than 10 distribution and fabrication centers throughout the world.

Founded in 1975, Latex International is the world's largest manufacturer of latex mattresses and pillows.

The company has shown its resilience in the past, and William Purcell, president of the Greater Valley Chamber of Commerce in Shelton, said he would not be surprised to overcome its latest challenge.

"Latex International is a valued employer and corporate citizen in our valley, and will continue to be a world leader in their industry during these bankruptcy proceedings," he said. The company "has a history of overcoming obstacles, including the tragic fire that leveled their Ansonia plant in 2001, and we fully expect will do so again."